Are you routinely checking the OIG's list of excluded individuals or entities (the LEIE)?
by Wayne H. van Halem

Are you routinely checking the OIG's list of excluded
individuals or entities (the LEIE)? If not, it should be part of
your regular background check when you hire new employees —
and an ongoing check as part of your HME company's corporate
compliance procedures. You shouldn't limit the search only to your
employees, either. You should also check referring physicians,
sales reps and subcontractors.

The law enforcement arm of the Department of Health and Human
Services is the Office of Inspector General. Part of the OIG's
authority is to exclude individuals and entities from participation
in federally funded health care programs, such as Medicare and

Why Is This Important?

When an individual is excluded from participation, it means just
that. First, if you hire an individual or entity that has been
excluded, and they perform services for Medicare or Medicaid
patients, then those claims cannot be reimbursed. The primary
effect of exclusion is that no payment will be provided for any
items furnished, ordered or prescribed by an excluded individual or
entity. Therefore, excluded persons cannot be involved in any part
of the process of providing services to Medicare or Medicaid

Even more important, if the OIG feels that you knowingly
submitted claims for reimbursement when an excluded individual or
entity was involved, you can be subject to civil monetary penalties
(CMPs) for doing so. In fact, you can be subject to CMPs just for
hiring an excluded person — and the penalties are steep.

A provider can be charged a fine of $10,000 for each claim, as
well as three times the amount charged, if the department feels the
supplier knew or should have known the person was excluded. Is that
a risk you're willing to take? The only way for you to know for
sure is to conduct routine checks of the LEIE database.

Further, the OIG has provided guidance to medical equipment
suppliers in implementing an effective compliance program. As part
of this guidance, the OIG clearly noted that one of the dedicated
compliance officer's primary responsibilities is to ensure that all
employees and independent contractors have been checked on the OIG
exclusion list. I highly recommend not only checking the list but
keeping a copy of the search in your employee files. Then, on a
regular basis, go back and do follow-up checks.

Another reason checking the exclusion list is so important is
because of the government's increased budget for program integrity
activities such as audits and health care reform initiatives that
have led to an expressed intent on behalf of the administration to
reduce improper payments in an effort to remain budget-neutral.

The OIG has several initiatives to ensure compliance with these
requirements and has said it "is considering a national initiative
to identify and recover payments to entities that collected
reimbursement from [excluded] employees." It's important to note
that the rules apply even if the exclusion occurred while the
individual was working in another health care field and changed

Why Are People Excluded?

There are two types of exclusions: mandatory and permissive. A
mandatory exclusion means the OIG is obligated by law to exclude
the individual or entity because of a conviction of one of the
following offenses:

  • Medicare or Medicaid fraud, as well as any other offenses
    related to the delivery of items or services under Medicare,
    Medicaid, SCHIP, or other state health care programs;

  • Patient abuse or neglect;

  • Felony convictions for other health care-related fraud, theft,
    or other financial misconduct; and

  • Felony convictions relating to unlawful manufacture,
    distribution, prescription or dispensing of controlled

In situations where the OIG has discretion about whether or not
to exclude someone, it is called a permissive exclusion. These

  • Misdemeanor convictions related to health care fraud other than
    Medicare or a state health program, fraud in a program (other than
    a health care program) funded by any federal, state or local
    government agency;

  • Misdemeanor convictions relating to the unlawful manufacture,
    distribution, prescription or dispensing of controlled

  • Suspension, revocation or surrender of a license to provide
    health care for reasons bearing on professional competence,
    professional performance or financial integrity;

  • Provision of unnecessary or substandard services;

  • Submission of false or fraudulent claims to a federal health
    care program;

  • Engaging in unlawful kickback arrangements;

  • Defaulting on health education loan or scholarship obligations;
    and controlling a sanctioned entity as an owner, officer or
    managing employee.

One of the most common reasons I have seen for physician
exclusions is for those physicians who have failed to pay back
their federal student loans. It's hard to believe, but if a doctor
in your area does this and gets excluded, and then orders equipment
for one of his or her patients and you provide it, then that claim
is not reimbursable and you can be held liable.

What Else Do I Need to Know?

The OIG has additional authority when excluding individuals, and
it is important to know and understand what that is. For example,
when an individual is excluded, in some instances their immediate
family members may also be excluded. This was done to avoid
excluded individuals' transferring the ownership of an entity into
the name of a spouse or child in an effort to avoid the exclusion

In addition to the owners of a company or an entity being
excluded, the OIG can also exclude officers and managing employees
of the company based solely on their position within the
organization, even if there is no evidence that they knew or should
have known what was occurring that led to the exclusion.

Last, while exclusions can be permanent, they aren't always.
Some individuals may be excluded for five years. If you find an
employee on the list and the period of exclusion has passed, it's
important to know that reinstatement in the program is not
mandatory and they must reapply.

OIG exclusions are maintained in a searchable list that
is available online at

Author and consultant Wayne H. van Halem, president of
The van
Halem Group
, Atlanta, has worked as a fraud analyst, Medicare
fraud information specialist and senior investigator. An Accredited
Healthcare Fraud Investigator and Certified Fraud Examiner, van
Halem provides counsel to all entities involved in the
participation, administration and oversight of public and private
health care plans. You can reach him at 404/343-1815 or